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The Impact of Public Scrutiny on Corporate Philanthropy

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  • Ailian Gan

Abstract

This paper proposes that a corporation’s vulnerability to public scrutiny drives its corporate giving. The hypothesis that companies donate for strategic motives is tested against the alternative that they do so for altruistic reasons. Court cases and news articles were selected as proxies for public scrutiny. Macroeconomic variables were used to gauge the level of public charitable need and test for altruism. Through examining the philanthropic behavior of 40 Fortune 500 companies over 7 years, this paper finds that companies are strategic and altruistic in their giving. Copyright Springer 2006

Suggested Citation

  • Ailian Gan, 2006. "The Impact of Public Scrutiny on Corporate Philanthropy," Journal of Business Ethics, Springer, vol. 69(3), pages 217-236, December.
    • Handle: RePEc:kap:jbuset:v:69:y:2006:i:3:p:217-236
    DOI: 10.1007/s10551-006-9087-4
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    References listed on IDEAS

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    1. Harbaugh, William T., 1998. "What do donations buy?: A model of philanthropy based on prestige and warm glow," Journal of Public Economics, Elsevier, vol. 67(2), pages 269-284, February.
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    4. Hansen, Wendy L. & Mitchell, Neil J., 2000. "Disaggregating and Explaining Corporate Political Activity: Domestic and Foreign Corporations in National Politics," American Political Science Review, Cambridge University Press, vol. 94(4), pages 891-903, December.
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    More about this item

    Keywords

    altruism; corporate giving; corporate philanthropy; strategic philanthropy; D64; G34;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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